Schumer and Bloomberg Clash on Ground Zero Plan

By CHARLES V. BAGLI and SEWELL CHAN

Published: February 28, 2006

Senator Charles E. Schumer and Mayor Michael R. Bloomberg clashed yesterday over competing visions for rebuilding ground zero in a rare display of tension between two of the state's most powerful politicians.

Senator Schumer said the mayor's proposal to build apartments and a hotel at ground zero instead of office space ''does not make sense'' and reflected a ''lack of confidence in downtown.'' He called on the Bloomberg administration to commit $1.75 billion in tax-exempt financing, known as Liberty Bonds, to commercial development at ground zero.

Mr. Schumer also demanded that the Port Authority of New York and New Jersey move its offices to the Freedom Tower, the most symbolic and expensive of five proposed office towers, and abandon its efforts to move to another tower at ground zero, which he said was better suited for corporate tenants.

Reacting to Mr. Schumer's remarks, Mr. Bloomberg immediately rejected the suggestions, using the more combative tone that has become a hallmark of his nascent second term.

''We're not going to put Liberty Bonds into something that would, two or three years from now, come to a grinding halt,'' Mr. Bloomberg said at a City Hall news conference. ''And I think the time to address this issue is before construction starts, right now, not when you're halfway done.''

Mr. Bloomberg said that the fundamental problem at ground zero would remain even if the Port Authority became the anchor tenant at the Freedom Tower: not ''enough money to make this project move forward.''

The city recently issued a report concluding that Larry A. Silverstein, the developer who controls the lease at the World Trade Center site, would run out of money for the project in 2009, then default on his lease and walk away with hundreds of millions of dollars in profit.

Neither Mr. Bloomberg nor Mr. Schumer has a seat at the table in the bitter negotiations under way. But Mr. Bloomberg has increasingly moved to insert himself in the debates about the rebuilding of downtown, which is largely controlled by Gov. George E. Pataki and the Port Authority, which owns the site.

To that end, Mr. Bloomberg also opened up another front yesterday in his critique of the progress of the ground zero rebuilding effort, saying he hoped that the people involved in the fund-raising for the memorial there were up to the ambitious task of raising what may be $1 billion for the project.

''The city has lots of obligations,'' he said, ''and if the plans require the city to come up with money, we're going to have to work through that.''

The sparring between the mayor and the senator came as something of a surprise, considering that the two have enjoyed a good relationship despite belonging to different parties. The mayor's transportation commissioner, Iris Weinshall, incidentally, is married to Mr. Schumer. Mr. Schumer has long argued that the trade center site should remain a commercial center.

''We are at yet another point where all parties must put aside their differences, come together to find a solution that will allow Lower Manhattan to get back on its feet, and become an economic engine once again for this great city,'' Mr. Schumer said yesterday to a breakfast forum sponsored by the Association for a Better New York.

His comments came just slightly more than two weeks before the March 14 deadline, imposed by Governor Pataki, for Mr. Silverstein and the Port Authority to resolve their differences over who will build what at the site, and when.

Mr. Pataki, who is considering a run for president when his term ends in December, has insisted on an April groundbreaking for the Freedom Tower, which is expected to cost more than $2 billion.

Behind the scenes, John P. Cahill, the governor's chief of staff, has been trying to broker a deal in time for the deadline, although Port Authority executives say that little progress has been made so far.

In a statement released yesterday, Lynn Krogh, a spokeswoman for the governor, embraced Mr. Schumer's proposals. ''We're glad that Senator Schumer agrees that all the remaining Liberty Bonds should be dedicated to ground zero, that it is appropriate to house government offices in the Freedom Tower and that construction should commence on an expedited basis,'' she said.

Mr. Schumer did not spare Mr. Silverstein from criticism either. He called on Mr. Silverstein to slash his development fee in half, a notion that could cost the developer more than $150 million, and adhere to strict construction deadlines for building five towers there. At the same time, he called for an independent auditor to assess Mr. Silverstein's ability to complete rebuilding.

As he was leaving the breakfast meeting where Mr. Schumer spoke, Mr. Silverstein, who contends that he is willing and able to build four towers at ground zero, said he could not be more supportive of recommendations that he get all the remaining Liberty Bonds to rebuild the towers and that the Port Authority should serve as the anchor tenant for the Freedom Tower.

Anthony R. Coscia, chairman of the Port Authority, with support from Mayor Bloomberg, has proposed his own solution for speeding up the rebuilding process and dealing with the financial shortfalls at the site.

He said Mr. Silverstein should proceed with building the 2.6-million-square-foot Freedom Tower and a second tower but relinquish control of two other building sites on Church Street and a major portion of the site in exchange for a drastic reduction in rent, which is now $140 million a year.

Photo: Senator Charles E. Schumer at Port Newark yesterday. He also spoke at a breakfast in New York. (Photo by Marko Georgiev/Getty Images)